Oddbins: details of proposed CVA emerge

Oddbins proposed Company Voluntary Arrangement would see creditors get just over a fifth of what they are owed back over a 46-month period.

The proposal, which was made to creditors today, means suppliers would get 21p in the pound back on outstanding debts. If they do not agree to the proposal, alternatives could include creditors moving to wind up the company, a pre-pack administration or voluntary liquidation.

Directors have agreedto waive any bonuses and accept a pay freeze over the period.

The company closed 39 loss-making stores last week, including making a further 120 full-time branch and head office staff redundant.

In the proposal, published on Deloitte’s website, directors estimate that they will generate earnings (before tax, interest, depreciation and amortisation) of £11.3 million within the alloted 46-month period, of which £4.7 million would be paid into the CVAs. Oddbins expects capital expenditure and renewals of £1.1 million while approximately £2.3 million is required to fund headroom and working capital.

Oddbins have made a provision for up to £3.2 million to be paid to Nicolas UK, depending on the outcome of litigation. Ex-Cellar Investments, Oddbins parent firm, is engaged in an ongoing dispute with the previous owner in respect of certain warranties and representations made when they bought the company in August 2008. In the event of the successful outcome of the case during the CVA period, half of the benefit would be made available for the CVA. 

The beleaguered high-street chain still has a lot of goodwill among the trade, and suppliers have come out broadly in its support. However, it is feared that commercial landlords who own leases on Oddbins’ buildings may not be as sympathetic to the retailer’s plight.

The creditors meeting will take place on March 31 at 10am for creditors and 12 noon for Oddbins properties at the Mermaid Event and Conference Centre, Puddle Dock, Blackfriars, EC4V 3DB.